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BC Place: A year under the big top wraps up

Provincial government banks on $514-million investment paying dividends over the long term

Leo the Lion engages the fans at the opening ceremony of the new re-furbished BC Place for the BC Lions vs the Edmonton Eskimos in CFL action in Vancouver on Friday,September 30, 2011.

Photograph by: Les Bazso
, PNG

VANCOUVER -One year ago this month, the newly renovated BC Place reopened to the sounds of Sarah McLachlan singing the national anthem at a game between the hometown B.C. Lions and the Edmonton Eskimos.

Sporting a spiky new hairdo and a hole in its roof, the iconic downtown stadium began its second incarnation with an expensive new lease on life and government hopes for economic renewal.

Gone was the air-supported dome long derided as a “mushroom in bondage.” Gone, too, were the traffic-blocking airlocks, the dirty-white curtain liners that hung from the roof, the terrible acoustics that scared off concert promoters, and the original 1980s washrooms that didn’t reflect modern demands for disabled accessibility.

In their place arrived the Vancouver Whitecaps (also beginning a second life as a newly minted Major League Soccer franchise), a sparkling new technological refit, a striking secondary retractable roof, the promise of new concerts and exhibitions, and expectations for a major casino, hotels and an office tower on the stadium’s unused corner properties.

Arriving at the same time was a whopping bill for just over half a billion dollars to fund improvements the government said were necessary and prudent to preserve one of the province’s major economic generators. A building that generated $50 million to $60 million annually for the local economy, the rebuilt stadium is now supposed to deliver at least $100 million per year.

The B.C. Pavilion Corp. (PavCo, which owns and operates BC Place) and the province say the stadium is already meeting that demand. During the first six months of operation, it generated $71 million in economic benefits, largely from the 2012 Grey Cup and the CONCACAF women’s Olympic qualifying soccer tournament in January. BC Place general manager Howard Crosley said in the first 11 months more than 1.43 million people visited the stadium, exceeding the previous annual average of 700,000.

Most of the $514-million construction budget was covered by provincial government grants and handouts, but at least $199 million is coming from the Crown-owned PavCo, which expects to recover those funds from development rights, concessions and — hopefully — increased attendance at games hosted by the stadium’s two major tenants, the B.C. Lions and the Whitecaps.

But these are difficult times for PavCo.

The beleaguered Liberal government, reticent to anger the public, killed a $35-million stadium-naming deal between PavCo and Telus in March.

Casino deal nixed

The casino project also ran into the stiff winds of opposition, and nearly went off the rails. Instead of ending up with a significantly expanded Edgewater Casino and two bright, shiny hotels, PavCo and casino owner Paragon Gaming barely escaped city council with a status-quo rezoning: the city agreed Paragon could move and even build the hotels, but not expand the size of the casino itself. That denial of the golden egg has cost PavCo at least half the annual $6-million lease revenue it anticipated from Paragon in the initial years.

The Telus and Paragon deals were supposed to help pay back a large chunk of a $150-million loan the government gave PavCo to help with the renovation.

There have been a couple of bright spots, however: PavCo spent $48 million less than it expected on its original $563-million construction budget. It also made a windfall of more than $30 million selling some density rights it received from the city in the casino rezoning process to a next-door developer.

But Vancouver city council has thrown another wrench into PavCo’s plans with its proposal to demolish the Georgia Viaduct, which runs right over the stadium’s eastern truck entrance and may imperil one of the development sites that is part of the loan-repayment scheme.

Empty seats

Attendance at Whitecaps games — originally projected to be 22,000 per game — is barely breaking 19,000, and when you consider that every ticket sold also means dollars in rental fees and concession spending for PavCo, making sure the seats are filled is a major preoccupation of both the team and BC Place management.

There is also considerable pressure for the stadium to show that its new retractable roof can find revenue-generating markets. While the successful, privately owned 19,000-seat Rogers Arena next door seems to easily draw any number of rock, country, heavy metal and pop shows, the stadium, with its 54,500 seats, is a tougher sell.

Since reopening on Sept. 30, 2011, BC Place has held just one concert, Roger Waters’ The Wall, in late May. That event was a successful litmus test for the relatively small stadium concert market, with promoters declaring the venue’s old ghost of bad acoustics now dead.

“If the Roger Waters acoustics weren’t so great, I think it would have been a challenge for us moving forward. But now we can get into the doors of those managers and agents,” said Graham Ramsay, BC Place’s director of sales and marketing. “They are saying, ‘Hey, this is different, this is not a domed stadium.’”

Ramsay says a little perspective is helpful here: During the past decade, the stadium has averaged less than one-half a concert a year, largely because of the economy and acoustics problems. But based on the concert industry’s positive response to the Roger Waters show, the stadium can expect up to four shows a year. That’s the equivalent of eight shows in the more compact Rogers Arena, he said.

The biggest change the renovation and roof has brought to BC Place is a new sense of direction, Ramsay said. In the past, the stadium was home to one sports team (the Lions) and made most of its money renting floor space to trade shows and events that didn’t require use of its seats.

“Our business model has changed to what the stadium should be in terms of spectator events. It is a different business model,” Ramsay said.

But there have been other little glitches along the way. Unveiled with much fanfare as one of the largest video screens in the world, the “jumbotron” can’t be seen from some seats in the lower bowl. PavCo’s solution: Install television monitors nearby those sight-restricted seats. General manager Crosley says the stadium had many more sight-restricted seats under the old configuration, when the only screen was a jumbotron at one end of the building.

During the recent renovation, PavCo replaced the stadium’s main water line, but not the many branch lines. That will end up costing the stadium another couple of million dollars, but Crosley said the work will be done during operational maintenance.

Also, the stadium’s staff is still wrestling with the considerable time it takes to convert the building for sporting events. Every time the Whitecaps or Lions play, it takes up to 48 hours for staff to deal with seating configurations, installing or retracting the Whitecaps’ secondary roof, and re-lining the field and re-programming the video boards. At $17,000-$20,000 per conversion, there’s an incentive for staff to become more efficient using the venue’s new technology, Crosley said.

By comparison, crews can convert Rogers Arena from concerts to hockey in less than 24 hours.

‘Absurdly lavish project’

PavCo chairman David Podmore argues these are the inevitable shakedown issues that come with any major project. Thankfully, there have been no major hiccups, he said, and with just one year under its belt, he believes BC Place has met its initial targets.

But not everyone sees such a rosy picture. The stadium’s two most-vocal critics, NDP MLA Spencer Chandra Herbert, who represents the riding of Vancouver-West End, and anti-casino crusader Sandy Garossino, say the rebuild was far too extravagant for what has been delivered.

Chandra Herbert has grilled provincial Jobs and Tourism Minister Pat Bell repeatedly over the half-billion-dollar cost. He’s frustrated the government still won’t make public the business case it used to justify the stadium renovation.

“My argument has always been that they should show me that this is the best way to spend $563 million. Were there other options? Certainly. Was this the only way? Definitely not,” Herbert said.

“We may look back in 20 years and have that discussion (that it was worth it). But I think to have that discussion in a real way, the Liberals really do need to release their business case so people can poke through their numbers.”

Bell says that for $514 million, the public got a stadium that would have cost $1.3 billion to build anywhere else. And when coupled with the new Vancouver Convention Centre, it positions the province to benefit from increased tourism andconvention visitor spending.

Garossino, who became the public face of the opposition to the Edgewater Casino expansion, has now set her sights on the stadium renovation itself. She says the government has failed to bring in the 40 acts or events that Podmore said would result from the renovation.

Garossino has gone so far as to suggest in a personal blog that were this a privately funded project, Podmore — a successful developer in his own right — and former PavCo president Warren Buckley “would have been drawn and quartered by their shareholders by now, based on the fundamentals behind this absurdly lavish project.”

Podmore says Garossino is taking liberties with what was promised. The stadium over the years has averaged 200 booking days a year, including conversions. PavCo expected the new facility would generate another 40. But as of this month, it has already been busy for 250 days, exceeding PavCo’s estimates. He said he never meant to convey that there would be 40 “new acts,” but rather 40 more days filled on BC Place’s calendar.

“She went a little over the top. I don’t see that argument,” Podmore said. “I’d say give us a chance. We’ve just finished the building. We’ve just had part of a season of operation.

“I’m satisfied the building is performing the way it was intended to. But I think it will take a few years to draw in these new events to the venue just because of the lead time it takes on getting bookings.”

Every one of the bookings this past year has acted as a test for future bookings, and the stadium will get busier in years to come, he said.

Garossino is unconvinced.

“I am extremely skeptical that they will ever achieve the numbers that were said to the public that they were going to get,” she said. “I hesitate to say what could have or should have been in that (location) in place of the stadium, but I do question whether that structure is ever going to either make money or maximize the return on investment that the public put into it.”

Rentals steady

Crosley argues the stadium, like the Vancouver Convention Centre, was never expected to be a pure profit generator. Instead, both facilities were conceived to generate economic activity for the city and the province. BC Place operates with an annual operating subsidy from the province of between $9 million and $12 million.

At 250 booking days a year, the stadium is as busy or busier than all other major stadiums in North America, Crosley said. BC Place must also hold back potential playoff days in the fall for both the Lions and Whitecaps. If the teams don’t make it that far, the stadium has to scramble — and take lower rates — to rent out the facility at short notice.

Still, marketing director Ramsay said BC Place is no slouch at generating rentals. It has a stable five-year contract with the B.C. Home and Garden Show, and is largely booked for the next five years during the spring, fall and winter. The stadium charges a basic rate of $40,000 a day for most one-off events, although the Lions and Whitecaps pay fees based on rent plus attendance. The teams also have the rights to the stadium’s 52 private suites, but BC Place gets all of the revenue from concessions.

Ramsay said there are plans next year for a proposed new “summer amphitheatre” music festival similar to the now-defunct Merritt Mountain Music Festival and Sasquatch Music Festival in Squamish. The stadium is also working on luring professional rugby.

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